3 Ways to Collaborate during the Innovation Process

In a previous post, I wrote about the importance of diversity in the innovation process. I suggested the use of one of four different kinds of networks to achieve innovation goals. In a world of resource, limitations collaboration is critical to reaching company goals. In short, to make the future together through collaboration.

Dorie Clark suggests the main ingredients of collaboration lie in collaboration capital together with the ability to show how your partnership will reach your shared goal. By offering collaboration capital, you provide a form of value useful to your potential collaborator, who should bring similar value in return.

Dorie suggests some forms of collaboration capital.

"Fetcher" Capital

This concept is similar to the hard work a fetcher would play in rugby. By offering to do the leg work, you're able to attract partners who have an elevated status. These partners possess a unique skill that breakthrough when facing specific challenges. Some examples are conducting a complex negotiation or ensuring innovation is legally compliant, etc.

"Expert" Capital

Domain knowledge experts know the targeted industry or particular topic well. Domain knowledge experts offer partners a reduced risk of unfavourable outcomes.

"Funder" Capital

Often external funding is needed to capitalise on the opportunity entirely. One way to increase the chances of collaboration with funders is to prove the probability of the deal. An example of evidence like this might be a signed letter from a potential client who has committed to signing up once the service has been created.

Innovation extracts enormous amounts of mind space. By collaborating with skilful partners with who you have aligned with your goals, you increase the probability of success.

What is a 10X technology?

I wrote about the four points a company must have to reach a significant value in a previous post. The list comes from Peter Thiel's book "Zero to One".

Thiel points out that is that the use of Proprietary Technology is critical to a company's success. He suggests that the technology backing the offering must exceed rivals by a factor of ten.

What is a 10X technology?

Genrich Altshuller proposes five levels to classify innovation by its impact, an index of sorts.

Apparent solution

A technology that seems new but doesn't offer any enhancement over current solutions. According to Max McKeown's book "The Innovation Book", 68% of new ideas fit into this category.

Improvement

An improvement is the optimization of a current solution. While it doesn't improve the solution's result, it does advance the path to the outcome. An estimated 27% of ideas fit into the improvement category.

Invention

Inventions offer significantly new offerings but from within the same frame of thinking as the alternatives. These ideas account for 4% of all ideas in use.

New Generation

Technologies that enable disruptive innovation fits within the "new generation" category. These systems define new rules for the entire system of interaction rather than a sub-section. 0.24% of ideas fit into this category.

New System

New systems have the same outputs as old systems but delivery those outputs in an entirely new way. 0.05% of all ideas implemented fit into this category.

Altshuller's pyramid gives a suitable means to classify the technologies driving the business to find a 10X technology. A 10X technologies are "New Generations" or "New System" levels of technologies and, as a result, promote the business offering to levels that convert to significant market share.

Building value

Peter Thiel has an excellent lineage for creating value through innovative company's. He co-founded Pay Pal, was the first outside investor in Facebook, and started Palantir Technologies - a big data analytics company valued at $20 billion.

In his book "Zero to One", Thiel classifies value as the sum of the money a business will make in the future. The ability a business has to reach that intended value lies in its ability to dominate the market it operates in.

Thiel suggests four different types of areas to measure your company against when seeking that potential:

1. Proprietory Technology

Proprietory technology is the heart, but not all, of the innovation that sets a company apart. Thiel suggests that the company's technology must enable the company to perform an essential aspect of the offering at least ten times better than the alternative.

2. Network Effects

Network effects are an offering's ability to appeal to a defined market strongly. The principle is that the offering gains strength as more people use/buy the offering. An example of this is a typical market like Apple's app store.

3. Economies of Scale

Profitable businesses should build a limited fixed cost that does not increase at the same rate as growth.

4. Brand

A brand is a promise from a company on its ability to deliver a product or service. For a brand to be valuable, the promise must stand out when compared against the market competition.

Businesses can build value through various paths, but a company on route to building good future value will display all four of these characteristics.